To promote the corporate bond repo market, regulators should allow mutual funds to participate in repos backed by lower-rated corporate bonds and also raise their investment limits in corporate bonds for guaranteed repos, said Kashinath Katakdhond, managing director, AMC Repo Clearing Limited (ARCL).

Expanding participation and risk appetite

“Regulators should consider expanding the participant base in the corporate bond market , encouraging more investors to take higher risks and support issuers with lower-rated papers. While we aim to gradually include ratings below AA, at this nascent stage, we restrict to AA-rated instruments,” added Katakdhond.

ARCL, which is regulated by both Sebi and RBI, offers clearing and settlement services to all trades executed on exchanges under trip

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